The decentralized finance (DFI) ecosystem has grown rapidly over the past few years. With the launch of Etherium (ETH) in mid-2015, application developers around the world began to write smart contracts for broad support for decentralized applications (DAPs). A few years later, other platforms such as EOS and TRON launched their mainnet in mid-2018.
Prior to their launch, the historic 2017 bull market brought a lot of attention to space, which was mostly a niche market. At the time, Bitcoin in the market rose from about $ 1,000 in January to around $ 20,000 in December 2017, and the price of Ethereum (ETH) skyrocketed from just 10 10 to over 4 1,400. Although there was a very strong correction later, many more individuals and organizations became aware of the possibilities of crypto.
As more users tried to transact across blockchain networks, it became clear that distributed laser technology (DLT) networks were not able to process transactions as quickly as high-performance networks such as Visa (NYSE: V) or MasterCard (NYSE: MA). Although blockchain platforms are fundamentally different from more conventional payment processing networks, both need to provide a seamless user experience.
Visa Executive identifies requirements for digital currency interoperability
This is why crypto and blockchain space are emerging with many new projects that can meet the scalability requirements. In addition to being able to handle a large number of transactions, blockchain networks also need to be inter-operative with each other. This means that if a user transacts with a set of tokens on a DLT network, they will be able to passively participate in transfers associated with other DLT platforms.
Katherine Gu, Global CBDC (Central Bank Digital Currency) Product Lead, Visa, recently noted that as the number of virtual currency networks continues to grow – each “unique design feature” – the potential for individual consumers, businesses and merchants to transact in a single network and the same The use of such money (or digital tokens) decreases.
Gu added that the payment giant Visa team believes that in order for the digital currency and token economy to be successful, they must provide a great customer experience and “wide merchant acceptance”.
This means, “We need to have the ability to pay and receive money regardless of currency, channel or form factor.” That’s why Visa has decided to develop their own universal payment channel. Although Visa can focus primarily on payments, it clearly shows that inter-operability between different networks, including blockchains, will be essential.
Creating decentralized values for cross-chain interoperability, liquidity transfer
That’s why projects like DeBridge have secured millions of dollars in funding to work towards establishing decentralized standards for cross-chain interoperability. The developers of DeBridge aim to increase cross-chain efficiency by allowing different DLT networks to exchange resources and information seamlessly with each other.
The goal of the DeBridge development team is to provide critical digital infrastructure that allows large blockchains such as Benson Smart Chain (BSC) and Etherium (ETH) to communicate with each other. Although DFI may be an important part of the future digital economy, achieving the goal of mainstream adoption requires the support of cross-chain interoperability protocols.
Debridge’s $ 5.5 million investment round, which was finalized in early September 2021, was attended by investors from Paraphy, Animoka Brands, Hubby Ventures, Lemonscap, Crypto.com Capital, Fundamental Labs, Bitscale and many more. Notably, the Debris Chainlink Spring 2021 started during the hackathon event, where the team won great prizes while competing against 140 high-potential projects.
The modern consumer demands more readily available and diverse financial services. These requirements have made it important to establish appropriate infrastructure to enable inter-operative functioning between different blockchains and financial ecosystems.